Homework Answers
A profit maximizing firm increases employment of labor as long as its marginal product of labor is higher than or equals to its real marginal cost i.e. real wage.
So, correct option is
marginal product of labor equals real wage.
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According to Chapter 3 (Classical Model), a profit-maximizing firm will hire labor up to the point...
18.)A profit-maximizing firm in a competitive market should stop employing additional units of a factor when...
18.)A profit-maximizing firm in a competitive market should stop employing additional units of a factor when a.)marginal revenue of the factor is maximized b.)price of the product is greater than the marginal cost of the factor c.)marginal cost of employing the factor is minimized d.)value of the marginal product of the factor equals the price of the factor e.)marginal product of the factor is maximized 19.)A firm in a competitive market will employ additional capital until its value of the...
சம் VU labor markets, firms hire: additional workers as long as the marginal produ s as...
சம் VU labor markets, firms hire: additional workers as long as the marginal produ s as long as the marginal product of labor is positive. the amount of labor needed to produce the profit-maximizing the amount of labor needed to produce the revenue-max the number of workers they can afford given a fixed budget. ce the profit-maximizing level of output. produce the revenue-maximizing level of output. Ceteris paribus, the value of the marginal product of labor (demand for labor by...
Write down the firm’s profit maximizing problem. Be sure to identify the variables the firm can...
Write down the firm’s profit maximizing problem. Be sure to identify the variables the firm can choose and which it takes as given. What should the firm facing the following scenarios do? • The marginal product of capital is greater than the rental price of capital. • The marginal product of labor is less than the wage.
Consider a competitive firm that produces bots. Labor (L) and capital (K) are the only two...
Consider a competitive firm that produces bots. Labor (L) and capital (K) are the only two inputs of production; each unit of labor is paid the market wage (w), and each unit of capital is rented at the rental price of capital (r). Output (Y) is therefore a function of labor and capital, or Y = f (K, L), and is sold at the market price (P). The goal of this firm is to maximize profit given the price of...
Consider a profit maximizing firm that uses a Cobb-Douglas production function Y = AKαL 1−α and...
Consider a profit maximizing firm that uses a Cobb-Douglas production function Y = AKαL 1−α and hires labor L at wage rate w and capital K at rental rate r. (1) Set up the profit-maximization problem of the firm and derive the first-order condition for the profit-maximizing choice of capital. (2) Show that the marginal product of capital is a decreasing function of capital. (3) Solve for the optimal choice of capital and show that the optimal choice of capital...
Below is the profit function for a household. Find the profit maximizing amount of capital to...
Below is the profit function for a household. Find the profit maximizing amount of capital to hire. Assume technology is 100, labor is 100, the real wage is 10 and the rental price of capital is1 5)- (W
Which of the following statements is correct?
Which of the following statements is correct?A. The value of the marginal product curve is the labor demand curve for competitive, profit-maximizing firms.B. A competitive, profit-maximizing firm hires workers up to the point where the value of the marginal product of labor equals the wage.C. By hiring labor up to the point where the value of the marginal product of labor equals the wage, the firm is producing where price equals marginal cost.D. All of the above are correct.
Name: e xemSon Port I: 30 Multiple Choice Questions (One point for each correct answer) 1....
Name: e xemSon Port I: 30 Multiple Choice Questions (One point for each correct answer) 1. A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the production function. Suppose the economy's production function is Y- 75x N xK, where K- 1000 and N 20, what happens if both inputs K and N are tripled? a. Y doubles. b. Y triples. c. Y quadruples d. Y is unchanged. 2. An adverse supply shock...
According to the long-run classical model, there will be a rise in real rental price of capital and a fall in real wage...
According to the long-run classical model, there will be a rise in real rental price of capital and a fall in real wage when the economy experiences an improvement in production technology and a fall in capital stock at the same time. True/False/Uncertain, explain with the aid of the rental market for capital and labour market diagrams.
Please explain your answer. 14. The competitive firm's profit-maximizing quantity of labor is the quantity where:...
Please explain your answer. 14. The competitive firm's profit-maximizing quantity of labor is the quantity where: A. the quantity of the marginal product of labor is equal to the market wage. B. the value of the marginal product of labor is equal to the profit. C. the value of the marginal product of labor is equal to the market wage. D. the quantity of the marginal product of labor is equal to zero.
சம் VU labor markets, firms hire: additional workers as long as the marginal produ s as long as the marginal product of labor is positive. the amount of labor needed to produce the profit-maximizing the amount of labor needed to produce the revenue-max the number of workers they can afford given a fixed budget. ce the profit-maximizing level of output. produce the revenue-maximizing level of output. Ceteris paribus, the value of the marginal product of labor (demand for labor by...
Consider a competitive firm that produces bots. Labor (L) and capital (K) are the only two inputs of production; each unit of labor is paid the market wage (w), and each unit of capital is rented at the rental price of capital (r). Output (Y) is therefore a function of labor and capital, or Y = f (K, L), and is sold at the market price (P). The goal of this firm is to maximize profit given the price of...
Below is the profit function for a household. Find the profit maximizing amount of capital to hire. Assume technology is 100, labor is 100, the real wage is 10 and the rental price of capital is1 5)- (W
Name: e xemSon Port I: 30 Multiple Choice Questions (One point for each correct answer) 1. A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the production function. Suppose the economy's production function is Y- 75x N xK, where K- 1000 and N 20, what happens if both inputs K and N are tripled? a. Y doubles. b. Y triples. c. Y quadruples d. Y is unchanged. 2. An adverse supply shock...
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